The Chargé in China (Tenney) to the Secretary of State
[Received January 30—10:47 a.m.]
30. Referring to the Legation’s telegram January 13th, 4 p.m. Premier and Minister of Finance now notify Pacific Development Corporation that unless said corporation advances $5,000,000 more before February 19th the previous advance of $5,500,000 will be repaid and the loan contract, including clause regarding organization of the wine and tobacco bureau with an American co-director general, will be canceled. The Chinese Government is negotiating a loan of 200,000,000 yen with the Japanese Okura firm out of which the repayment of the Pacific Development loan will be taken. If this scheme succeeds the Wine and Tobacco Administration will pass into the hands of the Japanese and the standing of Americans will be adversely affected. This constitutes a crisis in American relations with China and I respectfully ask that the Department will take the situation into immediate serious consideration.